Hello I'm back

Okay, so if you're back to the we can continue so we are still in the topic of
analysis, right strategic analysis and here we

be there, were discussing about the tools that we can use. And a very powerful tool
here is the SWOT analysis. So I'm sure many of you have heard or heard about this
before. But let's let's go over the topic to understand it better. So it's
basically a framework for, for analyzing it, companies, you know, both internal and
external environments. So we're, we're, of course, dwelling on external analysis
here, but it also is used to analyze the internal factors. And basically, its
constitution of strengths, weaknesses, opportunities and threats, the four words
generate an acronym for SWAT that's how it was formed. So where does the strengths
come from, for a firm it can come from the areas where the firm excels in right,
where they do it better than the others. And of course, the weaknesses would come
from the other way around, it comes from the areas where the competitors are better
than and of course, the opportunities and threats they might arise from external
factors. Like we talked about PESTEL right, so all those topics could create
opportunities or threats for a company. So using SWOT Of course, you know, managers
could do this analysis and this way they could base their strategy on certain you
know, on certain grounds and it's of course, helps companies be proactive in terms
of identifying and changing their strategies so, let's let's continue with how it
works. Basically, what you do is you try to list all the possible strengths,
weaknesses, opportunities and threats on one page. So, as you know, as I just said,
strengths and weaknesses are internal factors here. recording in progress,
opportunities and threats are external factors. So it's I mean of course, the
strengths and opportunities are approaching from a positive person perspectives
which are good for your company right while weakness then threats draw upon the
negative perspectives that might affect your company. So let's try to give examples
from Tesla again what are the strengths for Tesla it might be the brand power for
for Tesla, right. Let me try to

try to write it down on whiteboards Can you see my screen the whiteboard I cannot
see you there strange How about now? Yes. Okay, so let's try to write down
strengths for Tesla. Let Yeah, I will, I will give the word to you let's let's
discuss all together how what could be the number one strength for for Tesla

without being affordable environmental. So I will actually call the cars affordable
because they still like, you know, I mean, they they're still expensive compared to
mainstream cars. So that might be even a weakness for you know, for us and then,
and you know, we can put it on the weaknesses.

For Jim, I think is CCOs signal strength, is a good communicator is able to attract
the attention of people.

Yeah, so it's not just the, I agree with you. I mean, Elon Musk is doing a good PR,
I would say, so, you know, posting his strategy on, on his blog post. And then, you
know, with his tweets, he's doing a good job in there. But in general, we can call
that Tesla has a good brand power, right. So they have a well perception by the
consumers. It's like the iPhone of the automotive industry. So with that brand
power, they could feel stronger compared to the competition. So what else is do you
think? I mean, would you want to work in Tesla?

Technology using higher technology and advanced technology?

Yeah, you're right. They are they are very, I would say, not just for technology,
per se, but they would I mean, I would call them very innovative in terms of their
approach to the market, right. So they have changed everything almost in the
markets, not just the, you know, the cars themselves, but also the business model,
the servicing, you know, insurance. They are they're trying to innovate in every
possible way. So I would call them innovators. And then what I was asking you is
whether you'd like to join Tesla as an employee?

Yes, hmm. I think that's a big change, because you see a lot of groups, online kids
in schools that the gym is right, for Elon, Elon.

So it's actually a great place to work for, for many people. So they, you know,
they've got the they've got, of course, offices and factories in the US, they are
now opening another factory in Germany, they open their factory in China. So in all
those places, I'm sure many people are willing to work for for Tesla, which means
the workforce is above average, you know, the, in terms of the quality of the
workforce, I'm sure it's above average, even, you know, at a very high level, in
terms of their competency, and in terms of their Nova experience. So that's, I
believe, a good strength for Tesla. And then in terms of the range of the electric
cars in this room, but what is written and from the statistics that we see, they
produce the best cars in terms of the range, which is critical in electric cars,
right? You don't want to buy a car and you know, if you don't want the battery go
down after 200 kilometers. So Model S will travel more than 600 kilometers, which
is the highest in the industry. I believe almost all of their models Top all the
other competitors in the industry. So I can also say best range in terms of, you
know, in terms of the battery of the car also capital power because, you know, like
now that, I guess one of the most valued companies in the world, so they must have
some sort of very high financial power Well, let's, let's say that they've got a,
you know, let's say their market cap is their strengths right now, but in terms of
financial power, I'm not sure so let's discuss about the weaknesses you know, in
the, in the discussions that we had in the first week, you know, Elon Musk actually
has this goal to make the cars affordable, but he hasn't yet achieved that so
that's why I wrote they're not being affordable, at least for the moment, but he's
working on that and what I know from you know, many, many news from the press and
so on, sorry, their customer services also below wherever because they are new in
this business compared to many other car manufacturers and their services, the
customer service we can say is below well, but one thing that is even more critical
than that is the batteries because batteries are a critical part of the car. They
are only sourced from a single manufacturer currently own Panasonic's. provides the
batteries to the car and this is a huge bottleneck for for Tesla

so let me write so before that the results from a single supplier I mean, we might
find out many other strengths and weaknesses but let's I'm in for the sake of
keeping the discussion short let's go to the opportunities so in terms of
customers, what type of opportunities do you see

young demand for sustainable products is increased awareness increased

demand for sustainability and and in my mental awareness? Sir features like
autonomous driving in the future. That's right. That's a good opportunity for auto
normals. For the handwriting, autonomous driving, okay. How about the customers are
I mean, are you expecting them to attract more customers or it's already mature
from the customer base side?

And maybe the opportunity lies in the Asian market because it's quite unsaturated
so they could get one of the most significant opportunities I would say Asian
market.

Yeah, I agree. So they've got they've got potential for a huge growth in the Asian
markets

that's why they open their giga factory in China. So that's, I believe, the second
giga factory they opened after the US in China and then they are now opening the
German, German giga factory. We can say potential for growth in Asia and Europe,
right. So you know, both investments are critical investments for them for their
growth.

Oh, sorry. Maybe also the introduction of pickup trucks, I read that it's about
18%, of making 18% of the US automotive automotive market. So they could also
create electrical vehicles. In that case,

yeah. So there are opportunities to move to other segments, right? Is it what you
mean either.

So John, that's what I meant.

So there's also, you know, the opportunity to decrease down their costs rights
achieving by achieving economies of scale, we discussed about economies of scale in
the previous slide. So I believe that's also a potential, let's also say potential
to achieve economies of scale.

And they remember, I guess it was in the first week or the second week that we
discussed about this. They are trying to build a supercharger network. In order for
the cars to go above 600 kilometer range, they need to charge as quick as possible.
So the superchargers work for that. And, you know, just like the guest stations,
with the installation of these supercharger stations, you can either change the
battery at once, or you can stay there for 30 minutes and then charge the battery
of the car in the fastest way possible. So that's also something that is an option
for them as the Supercharger network expands, they will have more opportunity to
sell cars right.

Can I something? Of course, can we say having no competitor on the market is an

advantage or opportunity for them? Like, there is no big player like a producing
another electric car company. There are some companies like Porsche or Toyota, for
example, they are also producing electric cars, but they are not electricity car
companies. So there is no actual competitor on the market, a one to one competitor.
So is it the opportunity for them or threat? Like as you said, there is no charging
stations because of no, not so many competitors on the market. But this is an
advantage also, they don't compete with other brands at the same level?

Well, it actually could be like, I mean, thanks for drawing the attention to that
side of the business. I guess, maybe five years ago, when when the company was
formed, there were no competitors at all right. And that's what we discussed in the
previous sessions. But if you see the current market right now, current situation.
BMW is already there, right? They've got their electric, full, full electric car
options. Reno, is there already? I know that Jaguar is there, there. So there is
the Walt in the US. So I would rather put it into under threats, actually, what's
what you said. So this, we can call this is increasing competition. So the
competition yet haven't met their level of like we discussed about the range,
right, their car range is at the top, but still, there's increasing competition
from the established companies. And you know, when established companies come into
this markets, they might have even a better strength compared to Tesla. So that
that's why it makes it the big threat for Tesla for you know, other car companies
moving into electric cars. ocassion think there might also be regulations from
several countries. So think about Uber. So, you know, Uber cannot operate in
Turkey, right, because of the regulation of Turkish. Turkish Government. So
similarly, I mean, we we yet don't know about the regulations that would adversely
affect them. But there might be several regulations such as regulations on
autonomous cars right. So these types of things might affect the, their position in
the market and it is at the moment and unknown, let me say. So these these will
could be threats. Okay, so that's actually basically what I wanted to share with
you in terms of SWOT so, you know, that's what you do basically here is you know,
try to group all those factors under, you know, four headings on the strengths,
weaknesses, opportunities and threats. So, let me continue with the, with the
slides, because we've got to switch to the slide. Yeah. So, because we've got also
even if Further to that, we can use the SWOT analysis for So, this is not for the
analysis, but this is for the next step of the of the analysis, formulating a
strategy. I would like to you know, discuss about this topic here though, we are
not though we are not in the you know, in the phase of for strategic formulation,
it makes sense to discuss this year. So, this is actually an extension of SWOT
analysis and toes is reading SWOT backwards. So, it is it is proposed by a German
academician, and actually works very well to link analysis to strategy formulation.
So, what we do with SWAT is the analysis, but if you leave the swaps by itself,
then then it will be just in the analysis phase left there on its own right. So,
what is done with toes is, you know, you try to generate this matrix, where you
write down all your strengths company's strengths, weaknesses on these boxes here.
And then you also write down the opportunities and threats on these boxes here. And
then try to generate strategies using your strengths and opportunities, which is
the box here, right. So, these, this is s all strategies, and then you similarly,
use, you know the, your strengths and threats, you cross them and then write down
isti strategies. And similarly, you use your weaknesses and opportunities and come
up with double your strategies. And then WT strategies. Actually, I'm not a theory,
but I've got it in the next slide.

So, let me clearly annotation fully. So, what you do here is, you use strategies
and opportunities to define, you know, what type of strategies you can do, you can
use to take advantage of the opportunities. And then you identify, how you're going
to take opportunities by overcoming, take advantage of opportunities by overcoming
weaknesses here. And then, here, you try to identify what type of strategies you
can use your strengths to avoid threats. And lastly, you want to minimize your
weaknesses and avoid threats. So, that's those are the strategies that you use in
this part of part of the analysis. And how this works in general is by a more you
know, detailed approach you know, in order to generate the toes metrics, you you
need to list all external opportunities available in in the, you know, current
situation and then you numbered them as opportunity one opportunity to whatever how
many opportunities you have here. And then similarly, for threats. Similarly, for
strengths and weaknesses, you this this, you do you do this numbering. Then out of
that, you try to identify strategies by matching those strengths and opportunities.
So, you know, if you come up with a strategy by using the first strength and your
first opportunity listed here then you would call this en espanol, one strategy.

Similarly, if you're using this third strength with your second option D, then you
would come up with the s three or two strategy. That's how it works. Okay?

Any questions on this? So what what we can do together is actually we talked about
Tesla. And we said, in terms of its strengths, they have a brand power rights. So
we can right here as one brand power. And then with that brand power, what is the
opportunity we discussed about? We said, they they had, that there was this demand
for sustainability. And then there was this potential for growth in Asia and
Europe. Right, so, let's assume demand for sustainability is all one opportunity
one. And then in option two, we have autonomous driving. So let's skip that. And
then for option three, we have potential for growth in Asia and Europe. So, what we
can say is, you know, we can come up with an S one, or one or three strategy where
we can say, Tesla could use its brands power to develop in further countries to
invest in China and Germany. So that's a strategy that Tesla is already executing,
I would say, but still, in order to, you know, use the toll metrics, we can use
this, this, these two opportunities and link it with one strengths. And, you know,
although although we have all these examples, here, only based on two, you know,
two items from each cell, we can even say, Okay, it's going to be an S 101, or
three strategy for Tesla, combining its brand power, with opportunity, one, the
demand for sustainability, and then option two, three, potential for growth in Asia
and Europe. Any questions on this? Okay, then, let me also give one other example
and then move to the other topic. So previously, we discussed that there are some
also threat threats for Tesla, right. So there's, we said, there's increasing
competition coming from other car manufacturers. And then what could be the
strategy to avoid this, there is the threat, we can say, t one thread one is
increasing competition, but there's also a strength or several, you know, strength
of Tesla, which we said them being innovative, let's call this s two for example.
And then we said it's a great place to work. So, it attracts the you know, highest
caliber employees we said right. So, we can use those, you know, those two
strengths we can call this innovative is the can say as to is innovative and s3 is
great place to work. So, we can combine s two and s three to overcome the threats,
we call T one threat one. So, what Tesla could do, although there is this incoming
threats from the competition, Tesla could use their innovativeness and the you
know, the high caliber employees

to build

and sustain strategies to build cars and sustain strategies better than their
competitors. So this could be a use of, you know, the strengths versus threats. So
the matrix works this way. And you can come up with many different strategies and
actions out of out of this matrix. So it's one of the tools that I like using with
SWAT so that's why I wanted to mention this here. But in the strategy formulation
discussions that we're gonna hold in, maybe two or three weeks time, we might touch
upon this even further. So we've got, how many? How much? How many minutes? Do we
have? You got 10? more minutes or eight more minutes?

Three? You said three, two? Yes. Two now.

Okay, so time flies. Okay. So there is the other concept called the value nets. I
mean, I've got actually few slides on additional topics that may say additional
concepts that I thought would be worth to mention. So the value net similar to the
five forces, actually, it's, you know, represents the players in the industry or
players in the game, let's say, and try to analyze their interactions with, you
know, the interactions, you try to analyze between the players on this horizontal
axis, and then you try to analyze the transactions between the players on this
vertical axis. So with the suppliers and customers, the firm has direct
transactions, but with the complements and substitutes, which we talked about,
right substitutes could be those products that the customer you could use instead
of yours. And the complements are, you know, those products or services that could
have an impact on the value that you deliver. So like you, if you sell your car
with the best tire possible, it might add some value on top profits. Again, what
Tesla is doing is they're adding as a complement to a product, they're adding the
power wall, right, they're offering the power wall for you to charge your car at
your home. So that's also a complementary products. Like when you go to the movies,
what do you eat? In general, right, yeah, so popcorn is a complementary product to
the, to the movie tickets. So that's, that's how it works. So those could all help
in terms of generating value, additional value to the customer. Just a quick
example to that is, you know, in my industry, you know, I don't know if anyone has
built a PC, but you know, if you want to build a PC, then you will need the
motherboard and processes. So in you know, these actual two products complement
each other. So with the processor, you need to have the motherboard inside the
desktop to you know, for for you to run run the desktop. Okay, so I will leave this
slides. So this was the last slide. I will leave this slides and share it on auto
class and also I've got the further readings and we have one video for you. You can
also click that link. I think this was a good discussion with more infection this
time from you. Thank you so much for for today's session. Any questions before we
close? Okay, then have a great rest of today and we will meet on Monday next week.
Very much. Goodbye.
Transcribed by https://otter.ai